Avancept LLP has published a new report entitled Publicly Auctioned Patent Buyers: Intellectual Ventures & Others. This seeks to identify the organisations that bought patents at te publicly-held Open Tomo auctions that took place between 2006 and 2009, up to - and I think - including the last one that occurred before the OT auction business was sold to ICAP. It covers the 300 lots that were sold at the groundbreaking events which, on occasions, generated a great deal of money. It has always been widely rumoured, though never confirmed, that IV was the principal buyer at the sales; this report seems to confirm that:

... Intellectual Ventures purchased the lion’s share of the patents sold at auction. We found that IV appears to have purchased roughly 76% of the lots sold, with the remaining 24% split about equally between other non-practicing entities and operating companies.

By categorizing the buyers, we are able to provide increased granularity with respect to purchase prices than appears to have been previously reported. Intellectual Ventures paid more than $60 million for the lots having published pricing data, with the non-IV buyers paying some $20 million for those lots having published pricing data. Our research indicates that the operating company buyers, while few in number, tend to have paid the most per lot.

....

Our research also debunks the common myth that IV acquired most of its patents via auctions, as we find that the patents acquired likely amount to no more than 7% of the Bellevue-based company’s total portfolio. The report further debunks the often repeated rumor that Intellectual Ventures spends no more than $40,000 per patent.

That 76% figure is a surprise to me as I had often heard it said that it was much higher and certainly over 80%. But if you are doing three-quarters of your business with one outfit and it then decides it no longer wants to use your services, you are in big trouble. It certainly helps to explain why the bottom seemed to fall out of the public auctions business model so quickly - IV stopped buying and there was no-one there to take its place.

Recently, I spoke withDean Becker, who now runs the ICAP/OT auctions operation as part of his remit at ICAP. He was confident there is still a place for them, but more as places where the key players in the IP transactions market get together, rather than as significant revenue generators (though he did make one mysterious claim about a future event that would put everything else that ICAP does IP-wise into the shade). The next one is due to be held in San Francisco at the end of this month. I'll be keeping an eye on how it fares.

Sectors

Patents, IP business, IP finance, IP valuation

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